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Wireless Spectrum Auctions Part of Harry Reid's Debt Ceiling Bill

Since 2005 when Apple's iPhone kicked off a booming smartphone market, Americans have clogged up service providers' existing wireless spectrum with various apps and surfing the web.  Now, four and a half years after the iPhone's debut, that demand for wireless spectrum could help get the nation's out-of-control deficit and put an end to the ongoing debate over raising the debt ceiling.  Inside Senate majority leader Harry Reid's bill to raise the debt limit is a plan for the US government to make money by auctioning off valuable wireless spectrum, the frequencies over which wireless networks operate, to carriers.

This selling of spectrum could net the government as much as $13.1 billion over the next ten years, according to an estimate made by the Congressional Budget Office on Wednesday.  The amount is a paltry sum compared to the $2.7 trillion Reid's plan calls for in spending cuts in order to raise the debt limit by that much, but it's not pennies, either.  Despite the low amount of money involved, relative to the national debt, the plan is sparking a bit of controversy.

The National Association of Broadcasters has expressed concern that expanded wireless use of the spectrum would lead to interference with its channels, threatening the future of what it called “a great American institution, free and local television.”  However, the proposal submitted to prevent this interference would call for more spectrum being dedicated for TV signals, meaning the government would have less spectrum to auction off and less money Reid's plan would net.

Reid's debt ceiling bill is not the first legislation to address the issue of crowded wireless spectrum space.  A bipartisan bill co-sponsored by Senators Kay Bailey Hutchison and Jay Rockefeller, in fact, is currently awaiting a vote in the Senate after passing through the Senate Commerce Committee in June.  Reid's plan has also drawn criticism from the wireless industry, who claim that it underestimates the cost of a crucial part of the plan.  The bill allocates $7 billion to fund the creation of an emergency wireless network, whereas the Hutchison-Rockerfeller bill allots $12 billion for this purpose.  Reid's bill also reserves several billion dollars less for research and development funding than the nonpartisan bill.

This is certainly not the first time spectrum auctions have been hidden in larger budget bills.  In fact, since the Federal Communications Commission began selling off spectrum in 1993, every chunk of spectrum has been sold at an auction that was stuffed inside a broader budget bill.